Over at Forbes, they have an article about Electronic Entertainment Design and Research, a company that does sales projections for games. Using information from a 6,000 game database, they can (supposedly) “determine how certain developers and publishers, marketing budgets and release dates align to affect game sales”.

What everyone around the ‘net is picking up on, is EEDAR’s president Geoffrey Zatkin remarking that only 4% of games are profitable. That seems an astoundingly low number.

Of course, for every blockbuster like Fallout 3 or Halo 3, there are plenty of games that come and go before you’ve barely heard of them. Even some with heavy marketing don’t do very well.

Yet, could any industry survive for long on 4% profit? Could the returns on such a small number of games really keep things going? Is this the reason for the “game glut”?

Get out a few heavy hitters, and fill in the spaces with mediocre titles, hoping for the best? If that’s so, it doesn’t seem to be the best way to generate profit.

Naturally, any business wants to “give the customers what they want”. But if that 4% is accurate, it seems the game companies aren’t giving enough. Or perhaps, giving too much of the wrong stuff.

A friend of mine worked for Microsoft Games during the run of the original X-Box. He once told me that of a all of their first-party games released the first year, two mode moderate money, another three or so more-or-less broke even, and Halo paid for all the rest that lost money.

The thing is, though, Scorpia, is that the movie industry remains viable because behind it there are mounds and mounds of indie moviemakers who constantly inject new ideas, concepts and stories, which then gets appropriated by Hollywood. Some of the more successful indie people then may make it into the mainstream.

Which is why the movie industry isn’t in danger in imploding any time soon. I wonder, though… do you think that that’s the case for games?